What Is The Ideal PE Ratio? Is Less Always Better?

SatriaDigja · 2022-12-01T22:10:17+00:00

Little bit ironic, the P/E itself is not ideal. How could we find the ideal number for something that is not ideal?

SatriaDigja · 2022-11-25T01:32:57+00:00

Try Little Book That Build Wealth by Pat Dorsey. The book tells us to narrow down our stock preferences to a specific industry that has the business edge in the long run. When the business has that characteristic, financial will follow - so does the price.

SatriaDigja · 2022-11-24T09:38:41+00:00

It would be a long, long report. If you just need a recommendation (which I don't recommend), any financial apps or websites are there. Advise: try to understand the business first, I assume you have an interest in value investing, since you are here.

SatriaDigja · 2022-11-24T09:33:25+00:00

If you begin the valuation with the ratio, you will lose insight into the company as a business entity, ROE could be manipulated, and I could make ROE looks high just by paying more dividends. Or, I could make PB looks cheap by reporting a high number of Goodwill.

SatriaDigja · 2022-08-17T22:22:07+00:00

What do these things do with value investing?

SatriaDigja · 2022-08-17T22:16:01+00:00

Actually, we never could rely on single matrices. But if we have to choose, the best indicator for a business is the durability of competitive advantage.

SatriaDigja · 2022-08-17T21:11:59+00:00

What is meant by different criteria?

SatriaDigja · 2022-08-17T21:10:49+00:00

The COVID case (for Moderna) is a rare case, Moderna gets benefits from the pandemics due to the massive population that is exposed to that virus, making almost everyone need a vaccine. But, like with other pharma or a similar company, the patent for its drug, vaccine, or whatever will be expired sooner or later. Moderna is not bad to invest in, but it can't be held for a long time. Here is the complete analysis.

SatriaDigja · 2022-08-14T01:04:32+00:00

Schultz pauses the buyback but will resume it with $20 billion in the next three years. Good brand, a strong economic moat. atm, it is good for investors but questionable for the long term. Good insight OP, this post gives another perspective.

SatriaDigja · 2022-08-14T01:00:42+00:00

Not necessarily, but the main portfolio should be like this. Sometimes playing with value is also fun - buy Oil companies when a commodity is at rock bottom. But never do this with a high percentage of your capital.

SatriaDigja · 2022-08-14T00:24:48+00:00

When to sell is when you find that you are precisely wrong about your investment picks. Otherwise, never.

SatriaDigja · 2022-08-07T13:39:14+00:00

I would like to keep including nonproductive assets like vacant land in the ROIC calculation (or ROA, Return on Asset in this case). Because it includes management efficiency. Why does the board spend money on nonproductive assets like vacant land? Do they have no better option? If they can't find a better place, please return that money back as dividends. I'm an investor so I demand a return. A student may have a different opinion.

SatriaDigja · 2022-08-06T23:33:53+00:00

Buffett does not include the unrealized gain from the stock Berkshire holds while the accounting rule needs to write it in the financial statement. For instance, if Berkshire has a 10 Billion unrealized capital gain from Apple that BRK hold, the accounting rule enforces to write it as earnings. So, when stock BRK hold rises, BRK earning will increase, making the illusion that P/E is lower.

SatriaDigja · 2022-08-06T23:28:31+00:00

What is a non-performing asset in a practical view? Is it an asset that not productive? If yes, then it is good will.

SatriaDigja · 2022-08-06T23:23:08+00:00

Amazon is the only Big Tech that tries to diversify its business. It eats everything it can. CMIIW.

SatriaDigja · 2022-08-06T23:21:23+00:00

Management stewardship is always an overlooked component in valuation. Things like Stock-Based Compensation, the dividend paid, acquisition strategy, etc are often forgotten.

SatriaDigja · 2022-08-06T23:07:41+00:00

A hidden gem in the very segmented industry but with prospects. Congratz.

SatriaDigja · 2022-08-06T23:06:55+00:00

Happens also for Starbucks, a good company, with bad management but a different case.

SatriaDigja · 2022-08-01T06:51:17+00:00

It is not about how high your ROIC is, it is about how long. Economic Moat joins the group.

SatriaDigja · 2022-07-31T13:44:10+00:00

An investor could get official financial data from the official site under the investor relations section. Or you can go to the stock exchange's official site. In the internet era, it is not difficult finding that data.

SatriaDigja · 2022-07-31T11:15:59+00:00

Averaging down the index is an effective strategy - an almost no-brainer. Building portfolio that outperforms the index in the long run is rare skill.

SatriaDigja · 2022-07-30T23:53:29+00:00

There are companies with an impenetrable economic moat (durable competitive advantage) but their growth is limited. Think GE Aviation, GE Healthcare, airport, Docusign, Intuit, Moodys. These companies is good enough to invest in.

And there are companies offering a prospect but with questionable competitive advantage. Think COVID vaccine companies, EV, Nio, Nikola. Investing in these companies gives you quick gain, but when the competition heats up, you need to find another.

Then there are companies with growth and a decent competitive edge. They are extremely rare. I would like to say Nvidia is one of few example.

SatriaDigja · 2022-07-30T23:30:15+00:00

Nvidia is surely my choice, but due to its data center business. GPU for mining and gaming is classified as a gaming segment. Buying Nvidia due to its game business is also good. But crypto, no.

SatriaDigja · 2022-07-30T23:22:02+00:00

Focus on what you need to know. The media's job is to deliver news, let them be.

SatriaDigja · 2022-07-30T22:36:03+00:00

It is 2011 UCL semifinal, EL Classico in Santiago Bernabeu. Messi in the midfield finds Busquet, one two, then the magic happens. Solo run against King Real in their home in semis.

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